An Evolutionary Economic Analysis of Energy Transitions

Evolutionary economics offers clear insights into the mechanisms that underlie innovations, structural change and transitions. It is therefore of great value for the framing of policies aimed at fostering a transition to a sustainable development. This paper offers an overview of the main insights of evolutionary economics and derives core concepts, namely ‘diversity’, ‘innovation’, ‘selection environment’, ‘bounded rationality’, ‘path dependence and lock-in’, and ‘coevolution’. These concepts are subsequently used to formulate guidelines for the role of the government and the design of public policies, such as the learning from historical technological pathways and the creation of an extended level playing field. In addition, the developments of certain energy technologies are examined in detail within the adopted evolutionary economics framework. Three particular technologies received attention, namely fuel cells, nuclear fusion, and photovoltaic cells.

Innovation Management in Iberdrola

Innovation is Iberdrola’s main tool to guarantee its sustainability, efficiency and competitiveness. The model in Iberdrola is decentralised because the process is carried out independently in each Business Unit with support and coordination from the Innovation Department and open innovation because it seeks to involve Group technology suppliers such as universities, technology centres and equipment manufacturers in the innovation process. Research, Development and Innovation efforts comprise three main components: Efficiency: optimising operations, managing the life of facilities and equipment, bringing down operating and maintenance costs and reducing the environmental impact. New products and services to meet customer needs through digitalisation, automation and tailored solutions. Disruptive technologies and business models to tackle future energy challenges. The Company has organised its R&D Management System so that the Innovation Department can provide the Business Units with a global model, since we believe that there should be a single, standard and systematic innovation process for the entire organisation. Thanks to the commitment with Innovation, Iberdrola has positioned as a world leader in the offshore area, where it develops the most advanced and innovative projects. Wikinger Offshore wind farm is an emblematic project for Iberdrola, the symbol of Iberdrola’s commitment to innovation, sustainability and internationalisation

The economic design of a potential tradable permit system for SO2 emissions in the European Union

This paper contains two main parts. The first develops the issues of the European acid policy, and sets out the general background of the related regulatory regime. It also gives an overview of the theoretical and actual features of emissions trading mechanisms. It then considers the potential attractiveness of SO2 trading in the EU. This background throws light on the more specific analyses and proposals described in the second part of the paper, which is devoted to a presentation of possible frameworks for SO2 trading in the power generation sector in the EU. In section 2.1., we look at some key design variables. In section 2.2., we present three alternative ways of designing a trading scheme. In section 2.3., we consider specific issues related to zoning and scaling.

Scenarios for the development of smart grids in the UK: literature review

Smart grids are expected to play a central role in any transition to a low-carbon energy future, and much research is currently underway on practically every area of smart grids. However, it is evident that even basic aspects such as theoretical and operational definitions, are yet to be agreed upon and be clearly defined. Some aspects (efficient management of supply, including intermittent supply, two-way communication between the producer and user of electricity, use of IT technology to respond to and manage demand, and ensuring safe and secure electricity distribution) are more commonly accepted than others (such as smart meters) in defining what comprises a smart grid. It is clear that smart grid developments enjoy political and financial support both at UK and EU levels, and from the majority of related industries. The reasons for this vary and include the hope that smart grids will facilitate the achievement of carbon reduction targets, create new employment opportunities, and reduce costs relevant to energy generation (fewer power stations) and distribution (fewer losses and better stability). However, smart grid development depends on additional factors, beyond the energy industry. These relate to issues of public acceptability of relevant technologies and associated risks (e.g. data safety, privacy, cyber security), pricing, competition, and regulation; implying the involvement of a wide range of players such as the industry, regulators and consumers. The above constitute a complex set of variables and actors, and interactions between them. In order to best explore ways of possible deployment of smart grids, the use of scenarios is most adequate, as they can incorporate several parameters and variables into a coherent storyline. Scenarios have been previously used in the context of smart grids, but have traditionally focused on factors such as economic growth or policy evolution. Important additional socio-technical aspects of smart grids emerge from the literature review in this report and therefore need to be incorporated in our scenarios. These can be grouped into four (interlinked) main categories: supply side aspects, demand side aspects, policy and regulation, and technical aspects.

What is prosumerism for? Exploring the normative dimensions of decentralised energy transitions

Energy systems are in transformation towards increasingly renewable, decentralised, demand responsive and smart configurations. This has led to advocacy of the ‘prosumer’ phenomenon: characterised by actors who both consume and produce renewable energy. In parallel a range of prosumer business models are emerging, governed by a range of market, municipal and community actors. Through a series of semi-structured interviews, focus groups and documentary analysis - centred on a case study of Bristol in the UK - this paper critically evaluates the normative dimensions of prosumer business models, modes of governance and understandings of value. We discuss how competing ‘value logics’ are present within imagined futures of prosumer-ism, and through a novel conceptual framework, how these modes of governance may lead to divergent material outcomes in a decentralised energy transition. We argue that a more explicit recognition of competing theories of value, agency and change is needed in future discussions of prosumer-ism

The political economy of the clean development mechanism (CDM) governance system.

In spite of the exponentially increasing volume of the CDM system of the Kyoto Protocol, very few have so far come up with scholarly political economy analysis of its governance system. Based on interviews with the CDM system’s main stakeholders as well as through scrutiny of CDM related documents, this paper will contribute to filling this hole. In this respect, it is assumed that the political economy analysis can be based on two analytical concepts: First, the CDM governance system has to be legitimate (the political side of the system), i.e. seen as broadly acceptable and accountable by its stakeholders as well as the broader public. Second, the CDM governance system has to be efficient (the economic side of the system), i.e. involve as few transaction costs as possible. Based on these concepts, the paper analyses the present balances of the CDM governance system.CDM, climate policy, legitimacy, efficiency

A rapid review on community connected microgrids

As the population of urban areas continues to grow, and construction of multi-unit developments surges in response, building energy use demand has increased accordingly and solutions are needed to offset electricity used from the grid. Renewable energy systems in the form of microgrids, and grid-connected solar PV-storage are considered primary solutions for powering residential developments. The primary objectives for commissioning such systems include significant electricity cost reductions and carbon emissions abatement. Despite the proliferation of renewables, the uptake of solar and battery storage systems in communities and multi-residential buildings are less researched in the literature, and many uncertainties remain in terms of providing an optimal solution. This literature review uses the rapid review technique, an industry and societal issue-based version of the systematic literature review, to identify the case for microgrids for multi-residential buildings and communities. The study describes the rapid review methodology in detail and discusses and examines the configurations and methodologies for microgrids

Is there still a role for small wind in rural electrification programmes?

In the right context, Small Wind Turbines (SWTs) can offer a valuable complement to solar photovoltaics (PV) or diesel generators, offering diversity in power generation sources and the potential for local manufacture. However, the biggest challenges facing small wind are the high variability in the wind resource (in both space and time) and the high maintenance requirements of SWTs. What is more, PV prices have fallen dramatically in the last decade, resulting in the proliferation of an array of desirable and highly modular solar solutions, such as solar lanterns and Solar Home Systems (SHS). Consequently, outside of high wind regions, SWTs are now rarely directly economically competitive against solar PV. Going forward, SWTs are still likely to have a role to play, but in niche contexts and as a complimentary addition to hybridise solar PV or diesel systems, rather than as a standalone alternative. Market assessments are an essential first step to determine the relative viability of PV-wind or wind-diesel hybrid systems with PV or diesel systems in particular contexts. In favourable regions, the high maintenance requirements of SWTs can be tackled by providing stable institutional support to empower local champions, establish a decentralised maintenance network and foster the development of a local small wind industry. End users and local technicians should be empowered to carry out as much maintenance as they are able/willing to, especially in remote regions, where frequent long maintenance trips are likely to lead small wind electrification programmes to failure. Sustainable business models should focus on productive applications and addressing the weaknesses of diesel and/or solar generation through hybridisation

Smart Local Energy Systems (SLES): A framework for exploring transition, context, and impacts

Energy systems globally are becoming increasingly decentralised; experiencing new types of loads; incorporating digital or “smart” technologies; and seeing the demand side engage in new ways. These changes impact on the management and regulation of future energy systems and question how they will support a socially equitable, acceptable, net-zero transition. This paper couples a meta-narrative literature review with expert interviews to explore how socio-technical regimes associated with centralised systems of provision (i.e. the prevailing paradigm in many countries around the world) differ to those of smart local energy systems (SLES). Findings show how SLES regimes incorporate niche technologies, business models and governance structures to enable new forms of localised operation and optimisation (e.g. automated network management), smarter decision making and planning, by new actors (e.g. local authorities, other local stakeholders), and engaging users in new ways. Through this they are expected to deliver on a wide range of outcomes, both within the SLES boundary and to the wider system. However, there may be trade-offs between outcomes due to pressures for change originating from competing actors (e.g. landscape vs. incumbents in the regime); understanding the mapping between different outcomes, SLES elements and their interconnections will be key to unlocking wider benefits